Nationalizing Banks is a Socialist Idea that Only a European Economist would Endorse

If President Bush’s actions to create the so called Troubled Assets Relief Program (TARP) was socialism-light, the potential of a wholesale federal takeover of the banking system is socialism plain and simple.  The New York Post is reporting that Banking Analysts see three possible options to deal with the banking situation: 

  1. Create a National Bank to take over the banking system;
  2. Create a government owned to take control of toxic assets of the balance sheets of private banks; or,
  3. Continue the failed Bush TARP program to pump in taxpayer moneys when needed to aid distressed banks.
  4. The Conservative Free Market Option 4 — Stop the federal government from taking over banks and let the private sector work out the problem.

Bailouts have not worked and President Bush’s failed attempt to solve the banking problems cost the taxpayer $350 billion to date.  Options 1-3 are government centered solutions to the problem that will expose the taxpayer to trillions in financial risk.  The Post story cited a stat that some Wall Street firms have estimated that it will take $3 trillion to right the banks.  If the Bush Bailout didn’t work, why would the federal government attempt a bailout on steroids that will further implement a failed strategy of government intervention? 

House Republican Leader John Boehner (R-Ohio) has argued for a free market strategy and the end of the TARP program. 

An exit strategy from the taxpayer-funded Troubled Asset Relief Program (TARP) — an exit strategy aimed at getting the federal government out of the private sector.

Agreed.  Socialism of the banks is simply defined as state ownership and administration of our nations banks.  Any more government control of our banking system destroy America’s private banking system and will not solve the problems facing the financial sector.  If well educated corporate officials of these banks could not solve their own bank’s financial problems, why would we expect that unelected bureaucrats at the Department of Treasury will magically solve the problems of all of these distressed banks.  Nationalizing banks is a socialist idea that conservatives should fight.